Canadians need flood protection
Flooding is Canada’s greatest climate threat. Canadians need flood protection.
About 10% of all Canadian households are highly exposed to flooding but lack access to flood insurance. As we saw in central Canada in 2017 and 2019, southern British Columbia in 2021, Newfoundland and Labrador in 2022, Nova Scotia in 2023, and Ontario and Quebec in the devastating summer of 2024, the financial and emotional consequences for those in harm’s way are dire.
Canadians need affordable flood insurance to protect those at risk while reducing the financial burden on taxpayers especially since the impacts of our changing climate and severe weather continue to grow.
A low cost National Flood Insurance Program, delivered through a partnership between the federal government and the property and casualty (P&C) insurance industry, could help protect the 1.5 million households at high risk of flooding. At the same time, such a program would reduce disaster costs to federal and provincial government treasuries. Most other G7 countries, like the UK, US and France already have such programs in place.
The policymakers in Ottawa recognize that a public-private solution is needed – as evidenced by the Task Force on Flood Insurance and Relocation report. In 2023, Finance Canada committed seed funding to set up Canada’s first National Flood Insurance Program, modernize the Disaster Financial Assistance Arrangements program and set up a flood portal to educate consumers on their flood risk. However, the program requires operational funding – not just a pledge or commitment.
Canada’s P&C insurance industry has been working continuously with federal and provincial emergency management officials and national experts since 2016 to develop a solution to the country’s greatest climate threat. Canada’s P&C insurers are ready to set up, scale and deliver a program for affordable flood insurance.
The program’s implementation is the single most important step Canada can take to better protect homeowners from the financial risks of climate change today.
How do we protect people who live in high-risk flood zones if insurance is not accessible?
By funding and implementing a National Flood Insurance Program, which the federal government committed to in Budgets 2023 and 2024. Funding the program proactively, rather than responding in the aftermath of catastrophes with disaster financial assistance, is a more cost-effective approach that avoids the financial and emotional toll on Canadians when disaster strikes.
A partnership between P&C insurers and the federal government will help protect Canadians financially from flooding.
Insurers are ready to deliver the program, whenever the federal government is ready to go forward with the implementation.
How would a national flood program work?
The federal government has proposed that a reinsurance entity be set up as part of a partnership between Canada Mortgage and Housing Corporation and the property and casualty (P&C) insurance industry, so that all Canadians, no matter where they live, will have access to overland flood insurance through their existing home insurance policy. The new high-risk product will be offered by the same brokers or agents that homeowners work with today. The process will be seamless.
No administrative burden for government.
The flood insurance product is ready, and Canada’s P&C insurance industry is prepared to work in partnership with the federal government to rapidly scale and deliver the program.
IBC estimates by reallocating savings from the residential portion of existing disaster financial assistance, the program is expected to be low cost for provincial and federal governments.
Affordable, customizable options available for Canadians
Customers will have the option to adjust their deductibles and coverage to suit their needs and budget.
All Canadians deserve flood protection
Extreme flooding can have a devastating effect on communities. As the risk of flooding increases across the country, more and more Canadians are at high risk and either cannot access or are unable to afford flood insurance for their homes.